civil freezing orders

Author: Nyman Gibson Miralis

Subject: Freezing Orders

Keywords: civil freezing order, Federal Court of Australia Freezing Orders Practice Note

 

What is a civil freezing order?

The purpose of a civil freezing order is to prevent a person from accessing funds held in a bank account, relocating assets, disposing of, dealing with or diminishing the value of those assets, to prevent abuse of the process of the Court.

The respondent can be the person for whom the issuance of the freezing order directly relates to, or a third party who may have possession, control or even ownership of the asset.

A freezing order may apply to assets located anywhere in the world. Where a freezing order extends to assets outside Australia, the order should provide for the protection of persons outside Australia and third parties.

The Federal Court of Australia Freezing Orders Practice Note provides further information about civil freezing orders and the key considerations.

 

Who can apply for a civil freezing order?

A civil freezing order application can be made by any member of the public. For example, an employer may discover fraudulent conduct by an employee, and approach the Court to apply for a freezing order against the employee.

The value of the assets covered by a freezing order should not exceed the likely maximum amount of the applicant’s claim, including interest and costs. Sometimes this may not be possible, such as in the above example, the employer may not know how much has been misappropriated at the time of the discovery.

 

Are there any exclusions that apply to civil freezing orders?

The order should exclude legitimate dealings by the respondent with its assets, including:

  • Payment of ordinary living expenses;
  • Payment of reasonable legal expenses;
  • Standard business dealings, such as paying legitimate business expenses; and
  • Terminating contracts entered into before the order was made.

 

What is required of the freezing order applicant?

The Court will usually have certain requirements for freezing order applicants, including the usual undertaking as to damages. If it is demonstrated that the applicant may have insufficient assets to cover any potential damages, they may be required to provide security.

The order to be served should be endorsed with a notice which meets the requirements of r 41.06 of the Federal Court Rules.

An applicant for a freezing order made without notice is required to fully disclose any material facts to the Court, including possible defences known to the applicant and of any information which may affect the applicant’s ability to meet the undertaking as to damages from assets within Australia.

 

 

Nyman Gibson Miralis specialise in all aspects of freezing orders and asset forfeiture law. If you require assistance, contact one of our expert criminal defence lawyers